5-Year Plans: Jewelers on Their Ever-Evolving Industry

November 21, 2016byDaniel P. Smith

Surrounded by some of the globe’s most forward-thinking tech enterprises in Silicon Valley, Fanya Hull can’t help but think about tomorrow.

At Vardy’s Jewelers, Hull’s 35-year-old jewelry store located in Cupertino, Calif., less than one mile from Apple’s global headquarters, she monitors the future to better understand how consumer trends and sentiments, industry momentum, and global forces might affect her business in the present day.

“If you’re not considering what might be ahead, then you risk being stagnant,” Hull says.

For retailers like Hull, the future of the jewelry marketplace—the next five years in particular—presents a mixed bag of opportunities full of promise as well as challenges requiring a close eye and strategic planning. JCK spoke to a handful of retailers around the country about the issues that concern them most.

Millennials

As that generation has come of age in the past decade, retailers have bemoaned their seeming lack of interest in jewelry, predicting millennials would be the beginning of the end for brick-and-mortar jewelry stores.

Not so fast, says Dave Audette, co-owner of M.R.T. Jewelers in East Providence, R.I. Members of the millennial generation, which numbers some 80 million people in the United States, are interested in jewelry, though they do not fall victim to the traditional clichés.

Those shoppers, he adds, ask a lot of questions and seek genuine answers. They want to know about a diamond’s origin, the retailer’s backstory, why the store is selling rose gold rather than platinum. “They’re shrewd shoppers who want real info, not slogans or gimmicks.”

Beyond authenticity and openness, Audette thinks retailers must step out of their own comfort zones to capture millennials’ business. He notes, for example, that some are bypassing diamonds in engagement rings in favor of other options like pink sapphires.

“And if you don’t carry these things, you’d assume millennials aren’t buying,” Audette says. “You have to have the guts to inventory product you might not understand yourself, but products that might be an asset in your store.”

Over the next five years, millennials will wield significant purchasing power. By 2020, in fact, Accenture estimates that their retail spending will reach $1.4 trillion, accounting for nearly one-third of all purchases.

Digital Marketing

When one door closes, another opens. At least that’s how Sophie Shor, co-owner of Bridgewater, N.J.–based Roman Jewelers, looks at the current advertising marketplace. As consumers’ media consumption habits continue to shift, Shor says trust in traditional advertising media such as television, radio, and newspapers has weakened in favor of digital marketing, social media, and online recommendations. And this will only accelerate in the coming years, she maintains.

“The jewelry industry can sometimes be behind the curve adopting technology, pushing back until there’s no choice but to embrace it,” Shor says. “The sooner we embrace technology, though, the better we are.”

Roman Jewelers is currently active on Facebook, Pinterest, and Instagram and records tangible results from those efforts. Moving forward, the 27-year-old store will heighten its activity on YouTube, and Shor promises to put more financial resources behind “new wave” advertising opportunities.

“Digital marketing is much more cost-efficient than traditional advertising and allows us to connect with people in a more genuine way through comments and responses,” Shor says. “It’s constant work, there’s no question about that, but it’s important to our future.”

E-Commerce

While many retailers bemoan e-commerce, Shor sees e-commerce as a real—and necessary—opportunity for her store to capture buyers over the coming years. As consumers’ comfort level with shopping online increases, Shor says jewelry stores like hers need to prepare. “The public is ready and we need to be ready as well, or else we will be left behind.”

While Roman Jewelers does not currently have an e-commerce site, Shor continues to explore the option, reviewing other retailers’ online stores and talking with fellow industry operators to gather firsthand insights. She acknowledges that e-commerce is a significant investment, but one that could “put time on our side.”

Even though a number of jewelry retailers have seen lackluster sales from e-commerce ventures, online stores hold benefits beyond direct sales. Nearly 9 out of 10 millennials say having access to real-time information on product availability would influence the stores they choose to frequent, according to Accenture.

“It used to be your store windows were your window to the world; now, the Internet is a store window 24/7,” says Anthony Taitz, owner of Arlington, Va.–based Protea Diamonds.

Chains vs. Independents

Last year, 760 U.S.-based retail jewelers/repairers ceased operations, according to the Jewelers Board of Trade. The mounting number of independent closures coincides with growing momentum among the industry’s well-established chains.

“The major chains are getting better at what they do, and they combine that with technology, advertising dollars, and more resources than a 50-year-old independent could ever dream of,” Audette says.

The growing divide between single-store owners and chains is creating an increasingly complicated reality that some worry could drive up costs and intensify competition in a Darwinian race.

“Only the strongest survive,” says Akshay Andy Anand of Karats, an 11-year-old retail business in Overland Park, Kan. “You need to keep your eye on the ball, constantly innovating and looking at every aspect of your business. You can’t let anything slip away.”

Taitz says jewelry retailers must adapt and evolve, ditch redundant old practices, and become mindful of trending products such as rose gold and morganite.

“We all need to figure out what’s on the upswing and navigate this minefield,” says Taitz, whose company is celebrating its 30th anniversary this year.

Relevance is the name of the game—and relevance demands thoughtfulness and concentrated effort.

“You cannot think everyone is always going to want jewelry, so you need to promote your business in a way that makes sense for consumers,” Audette says.

Niches and Specializations

“Complacency kills,” Anand warns, and in the coming years jewelry retailers will have to pioneer in whatever categories they choose to fill, establishing a niche or specialization that others cannot readily match.

Karats, for instance, has built its business on three legs: bridal, watches, and service. On the bridal side, Karats markets itself as Kansas City’s engagement ring destination and closely monitors styles and trends, which are then reflected in a robust inventory inside its 5,500-square-foot storefront.

“You cannot sustain yourself with only a few lines,” Anand says. “You have to provide customers with so much selection that you don’t lose the sale, all while being selective and shrewd with your buying.”

At Vardy’s, Hull continues to emphasize the shop’s reputation as a custom jeweler, confident that consumers will increasingly embrace one-of-a-kind pieces rather than mass-market reproductions. “People want something different and something no one else has.”

Long-standing independents, meanwhile, can make headway by leveraging their track record. In Marquette, Mich., for example, Jandrons Fine Jewelry continues to tout its 26-year reputation as a family-owned business rooted in honest, reliable service.

“This is something the Internet doesn’t have,” says Jandrons manager Jon Arntsen. “We’re the place people can come to make an educated purchase. We’re the ones who will sell the product, repair it, and maintain it. We need to make sure this is known.”

The Road Ahead

Five things retailers can do today to help drive a brighter future

• Renovate: From fresh paint and new lighting to a complete overhaul, a remodel can modernize the store and attract a new clientele.

• Develop human capital: Invest in the strongest employees and reward their efforts, which boosts retention and the bottom line.

• Silence the noise: Dave Audette of M.R.T. Jewelers doesn’t have any control over the national economy or wholesale pricing, so he instead focuses his efforts on things he can control such as training and marketing.

• Shorten the business plan: Anthony Taitz of Protea Diamonds says a two-year business plan, rather than the traditional five-year treatment, helps retailers better anticipate and adjust to shifting marketplace conditions. —DPS